58 Business The EconomistOctober 26th 2019
2 line-of-business prohibition seems a rela-
tively easy sell politically. The most likely
victim is Facebook. Privacy scandals and its
role in distributing misinformation have
made the firm a target for both Democrats
and Republicans.
The case against Facebook is relatively
easy to make. Scott Hemphill and Tim Wu,
two legal scholars based in New York, have
already started advancing it. Backed up by
Chris Hughes, a co-founder of Facebook
now turned critic of the firm, they have
been giving presentations to regulators ex-
plaining that “available evidence indicatesthat as of 2010, Facebook launched a pro-
gramme of serial defensive acquisitions in
order to maintain its dominance.”
Legal arguments notwithstanding, it
will be hard to unscramble the eggs.
WhatsApp is still a separate entity but In-
stagram is not. It uses the same advertising
platform as Facebook’s social network. And
the firm is busy tying its biggest services to-
gether even more tightly by merging their
address books. Facebook subscribers will
at some point be able to send messages on
WhatsApp. The goal, the firm says, is to
make life easier for users. Critics argue thatthe aim is to make divestiture more diffi-
cult. To avoid “irreparable harm”, Messrs
Hemphill and Wu call on regulators to ask
for a preliminary injunction that would
put an end to the integration work.
Mark Zuckerberg, Facebook’s boss,
knows that he has a target on his back. If Ms
Warren were elected president, he recently
told staff, “then I would bet that we will
have a legal challenge.” He would also bet
that he would win, he added. Mr Zucker-
berg may want to read up on the history of
Standard Oil. Rockefeller thought so too—
until it was too late. 7Bartleby Khan-do attitude
Economist.com/blogs/bartlebyI
t seems obviousthat, for a company to
succeed, it needs the right products.
But many people believe the right culture
is just as important. Creating that culture
has been the holy grail for managers ever
since Tom Peters and Robert Waterman
focused on the issue in their book “In
Search of Excellence”, published back in- While the idea has never disap-
peared completely, it has come back into
fashion today.
A prime example is a new book called
“What You Do Is Who You Are: How to
Create Your Business Culture” by Ben
Horowitz, of the venture-capital firm
Andreessen Horowitz (playfully known,
because of the length of its name, as
a16z). Mr Horowitz uses some unexpect-
ed examples as his case studies—Gen-
ghis Khan, Japanese samurai, Toussaint
Louverture (who led a slave revolt in
Haiti) and a reformed gang leader called
Shaka Senghor.
It is easy to sense some wish fulfil-
ment in these archetypes: the Silicon
Valley tycoon, armed only with an
iPhone, seeing himself as the modern
equivalent of a historical warrior. That
sense is heightened when Mr Horowitz
talks of the contrast between “wartime”
and “peacetime” chief executives, an
analogy seemingly drawn from “The
Godfather”, a movie about the mafia.
Thankfully, the book is not the orgy of
macho chest-thumping that these ex-
amples might suggest. Mr Horowitz
draws some thoughtful lessons from
each of his case studies. Take Genghis
Khan. He is best known for his rapid
conquests and bloody massacres but the
leadership lesson that the author draws
relates to Genghis’s meritocratic ap-
proach. He was willing to promote peo-
ple from conquered tribes and allowed
religious freedom in his empire. The
only condition was allegiance to his rule.
Toussaint Louverture was notable for
his clear ethical code and his willingness
to forgive his enemies; he even let slave
owners on Haiti keep their land, provided
they agreed to reward their workers prop-
erly. Shaka Senghor also imposed a strict
code of behaviour on his prison gang.
The underlying principle is that culture
cannot just be a pious-sounding mission
statement in the annual report. It has to be
expressed in the form of actions on a daily
basis. Indeed, the culture must be applied
consistently. As Mr Horowitz writes “You
can’t pat yourself on the back for treating
your employees ethically if you’re simulta-
neously lying to your customers because
your employees will pick up on the dis-
crepancy and start lying to each other”. The
goal is to embed the culture so deeply that
employees will behave in the right way
even when no one is looking.
Leaders set the tone. If they lie, shout or
swear, then others will do the same. The
corollary is that, if they want to encourage
good behaviour, they have to get involved.
Companies may want a diverse staff butall too often, Mr Horowitz says, they try
to achieve this by appointing a “head of
diversity” or hiring consultants. At An-
dreessen Horowitz they insist that man-
agers consult more widely by asking, for
example, African-Americans what tal-
ents they would look for in a new candi-
date. The firm’s staff is now 55% female
and 22% African-American.
But of course, some cultures can have
bad effects. At Uber, a ride-hailing giant,
the group’s values included such mes-
sages as “champion’s mindset” and
“always be hustlin’ ”. The effect was to
create a highly competitive culture that
eventually had malign consequences in a
series of scandals, leading to the depar-
ture of Travis Kalanick, Uber’s founder.
Mr Horowitz argues that the board
should have realised that the company’s
aggressive culture would eventually lead
it into difficulty.
The examples chosen by the author
are certainly colourful but they seem just
as likely to have inspired Mr Kalanick as
they might a modern, culturally sensitive
chief executive. Running a business is
not like conducting a war where casu-
alties suffered on the road to victory are
often regarded as little more than collat-
eral damage.
It is also worth remembering that
Genghis Khan’s empire disintegrated
within a generation of his death and that
the Japanese economic miracle occurred
only after the country had thrown off the
rule of the samurai class.
Great leaders in history have not all
been men of violence; some of them,
indeed, have been women. Managers
looking to set the right corporate culture
might want to choose their role models
from a more diverse group.A titan of Silicon Valley draws lessons from warriors of the past